Rich rewards often involve high risks, and the same is true for highly volatile cryptocurrency markets. Uncertainties around 2020 globally led to increased interest from the masses and large institutional investors in cryptocurrency trading, a new age asset class. Increasing digitalisation, a flexible regulatory framework and the lifting of the Supreme Court’s ban on banks dealing with cryptocurrency companies have parked more than 10 million Indians in investment last year. Several major global cryptocurrency exchanges are actively exploring the Indian cryptocurrency market, which has shown a steady rise in daily trading over the past year amid a sharp drop in prices as many investors looked to value buying. As the cryptocurrency trend continues, many new cryptocurrency exchanges have emerged in the country that enable buying, selling and trading by providing functionality through user-friendly applications. WazirX, India’s largest cryptocurrency trading platform, doubled its user base from one million to two million in January-March 2021.
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What drives the world’s largest cryptocurrencies to the Indian market?
In 2019, the world’s largest cryptocurrency exchange in terms of trading volume, Binance acquired the Indian WazirX trading platform. Another crypto start, Coin DCX secured the placement from Seychelles ’BitMEX and San Francisco-based giant Coinbase. By June 15, 2021, Indian cryptocurrency and blockchain start-ups have attracted $ 99.7 million in investment, totaling about $ 95.4 million in 2020. Over the past five years, global investment in the Indian crypt market has grown by a staggering 1487%.
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Despite India’s unclear policy, global investors are making huge bets on the country’s digital coin ecosystem due to a number of factors such as e.g.
• Technical Indian population
The majority of the population, 1.39 billion, are young people (median age 28–29 years) and have technical skills. While the older generation still prefers to invest in gold, real estate, patents or equities, newer ones adopt high-risk cryptocurrencies because they are more adaptable to them. India ranks 11th in the Chainalysis 2020 report on the global deployment of krypto, showing enthusiasm for krypto issues among the Indian population. Nor will the government’s less friendly attitude towards the crypt or the rumors revolving around the krypto undermine young people’s confidence in the digital coin market.
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India offers the world’s cheapest internet connection, with one gigabyte of mobile data costing about $ 0.26, compared to the global average of $ 8.53. So nearly half a billion users take advantage of affordable Internet access, improving India’s chances of becoming one of the world’s largest cryptocurrencies. LikeWeb says the country is the second largest source of online traffic for its peer-to-peer Bitcoin trading platform, Paxful. While the mainstream economy is still struggling with the “pandemic effect,” the cryptocurrency is gaining momentum in the country as it offers the young generation a new and fast way to make money.
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It is safe to say that cryptocurrencies can become Indian millennials, what gold is to their parents!
• Rise of Fintech start-ups
The cryptocurrency craze led to the emergence of several trading platforms, including WazirX, CoinSwitch, CoinDCX, ZebPay, Unocoin, and many others. These cryptocurrency exchange platforms are highly secure, accessible from a variety of platforms, and enable instant events, providing a cryptographic interface for cryptocurrents to purchase, sell, or trade unlimited digital assets. Many of these platforms accept up to 0.1% of INR’s purchases and trading fees, so simple, fast, and secure platforms offer a lucrative opportunity for both first-time investors and local traders.
WazirX is one of the leading cryptocurrency exchange platforms with more than 900,000 users and offers customers peer-to-peer business. CoinSwitch Kuber offers the best cryptocurrency exchange platform for Indians and is ideal for beginners as well as daily traders. Unocoin is one of the oldest cryptocurrency exchange platforms in India with over one million merchants through mobile applications. CoinDCX offers users more than 100 cryptocurrencies as an alternative to exchange and even offers investors insurance to cover losses in the event of a security breach. So global investors are watching India’s numerous cryptocurrency exchange platforms to take advantage of emerging markets.
• Miscellaneous government response
A bill banning virtual currency, which would criminalize anyone who holds, issues, mines, trades and transfers cryptocurrencies, may come into force. However, Finance and Enterprise Minister Nirmala Sitharaman eased the concerns of some investors by saying the government had no plans to ban the use of cryptocurrencies altogether. In a statement to the leading English newspaper, the Deccan Herald, the finance minister said: “For our part, we are very clear that we do not close all options. We give people certain windows to experiment with the blockchain, bitcoins, or cryptocurrency.” It is clear that the government will continue to review the national security risks of cryptocurrencies before deciding on a total ban.
In March 2020, the Supreme Court overturned a central bank decision to ban financial institutions from trading in cryptocurrencies, causing investors to accumulate in the cryptocurrency market. Despite a long-running fear of a ban, transaction volumes continued to grow, and user registration and cash flow at the local cryptocurrency increased 30-fold year-over-year. One of India’s oldest exchanges, Unocoin added 20,000 users in January-February 2021. Zebpay’s total daily volume in February 2021 corresponded to the volume generated during the entire month of February 2020. In an interview with CNBC-TV18, the Finance Minister for India’s cryptocurrency scenario said: “I can only give you this hint that we are not thinking, but we are exploring ways to experiment in the digital world and cryptocurrencies.”
Instead of sitting on the sidelines, investors and stakeholders want to do their best to spread the digital coin ecosystem until the government introduces a ban on “private” cryptocurrency and unveils a sovereign digital currency.
Is India on the road to economic inclusion through cryptocurrency?
When the ever-growing number of female investors and traders was seen as a “boys’ club ”due to the commitment of men in the cryptocurrency market, it has led to more gender-neutral new and digital investment methods. In the past, women stuck to traditional investments, but now they are becoming risk takers and venturing into the crypt space in India. After the Supreme Court clarified the legality of the “virtual currency,” India’s cryptocurrency platform CoinSwitch witnessed an exponential 1,000 percent increase in its female users. Although female investors still make up a small part of the crypto community, they face stiff competition in the Indian market. Women tend to save much more than their male counterparts, and greater savings mean a more diverse investment target, such as high-yield assets such as cryptocurrencies. Women are also more analytical and better at assessing risks before making the right investment choices, making them more successful investors.
Increasing the general institutional introduction of cryptocurrencies
The uncertainty and panic caused by SARS-Covid 19 led to a liquidity crisis even before the economic crisis. Many investors turned their holdings into cash to secure their finances, leading to a collapse in bitcoin and altcoin prices. But even though the crypt suffered a major collapse, it still managed to be the best-performing asset class of 2020. The system’s increased vulnerability and loss of confidence in central bank policy and money in its current design people have an increased appetite for digital currencies, leading to an increase in cryptocurrencies. Thanks to the brilliant performance of cryptocurrencies in the midst of the global financial crisis, the uptrend has strengthened interest in the virtual currency market in Asia and the rest of the world.
In addition, digital payment gateways such as PayPal have shown support for cryptocurrencies that allow consumers to hold, buy or sell virtual assets, increasing society’s demand for convenient and reliable transaction solutions. Tesla CEO Elon Musk recently announced that he would invest $ 1.5 billion in the cryptocurrency market and that the power company would accept bitcoins from buyers, leading to an increase in international bitcoin prices from $ 40,000 to $ 48,000 within two. days. The two largest payment platforms around the world, Visa and Mastercard, also support cryptocurrencies by introducing them as a means of payment. Although Visa has already announced that it will allow transactions with stable coins in the Ethereum block chain, Mastercard will start cryptocurrencies sometime in 2021.
What will the future of India’s cryptocurrency market bring?
The Indian cryptocurrency market is not immune to terrible cryptocurrency bids. Despite huge investments from global colleagues, local investors continue to distance themselves from cryptocurrencies due to the uncertainty about the legality of the Indian digital coin ecosystem and the high volatility of the market. Although the cryptocurrency market has flourished since last year, Indians own less than 1% of the world’s bitcoins, creating a strategic disadvantage for the Indian economy. The Indian government intends to appoint a new panel to examine the possibilities of regulating digital currencies in the country and to focus on blockchain technology and propose it for technological improvements.
The ability of blockchain technology to provide a secure and immutable infrastructure has been implemented in various industries to embed transparency in events. In a country with more than 15 million krypton adopters, the Committee’s new recommendation could be of great value in determining the future of cryptocurrencies in India. However, stakeholders believe that technical and economic power will make India a key player in the crypto and blockchain market. Gradually, cryptocurrency is gaining widespread acceptance, which could lead to the proliferation of the digital currency.
According to another TechSci Research Report on “Indian Cryptocurrency Market By offer (hardware and software), by process (mining and transactions), by type (Bitcoin, Etgereum, Bitcoin Cash, Ripple, Dashcoin, Litecoin, others), by end user (banking, real estate, stock market and virtual currency), By Region, Forecast & Opportunities, 2026 “, India’s cryptocurrency is expected to grow at a significant CAGR due to a growing transparency requirement and lower transaction costs. In addition, the proliferation of digital currency and growing blockchain technology are fueling India’s cryptocurrency market.